Timeshare exit specialist brings defamation proceedings against holiday home business

The action is over statements allegedly made at the Mt Hutt Lodge body corporate meeting. Photo / Mt Hutt

A business which helps clients escape from holiday timeshare contracts is suing a holiday homes timeshare business for defamation.

Exit Timeshare Now (N.Z.) lodged proceedings against timeshare specialist Classic Holidays and an initial hearing was held this month in the High Court at Christchurch before Justice Dale Lester.

That was a preliminary action over security of costs, with Classic seeking $45,000 from Exit which wanted to put up only $33,460.

The judge said the two parties were not that far apart in terms of offer and counter offer and he ruled Exit must put up $32,000.

Classic is a timeshare resort management company. Its business includes providing management services to body corporates of timeshare resorts, the judge noted.

Exit provides advice to owners of timeshares about how to exit their timeshares, hence its name, the judge said.

Exit brought the defamation action as a result of what it says were defamatory statements made about it at a meeting of the Mt Hutt Lodge body corporate committee. It was not at issue that the regional operations manager of Classic Holidays was present at that meeting, the judge said.

"The statement of claim alleges that in the course of the meeting, a Mr White, (who with his wife held a timeshare in Mt Hutt Lodge), held up a pamphlet published by Exit Timeshare and advised those present at the meeting that he had received it from Exit Timeshare's office in Paihia. This pleading is denied," the decision said.

The statement of claim pleads that an unnamed Classic representative said to those at the meeting that they should avoid Exit Timeshare.

It is then pleaded that the regional operations manager of Classic made a number of statements about Exit which were said to be defamatory, the decision out this month said.

Classic said there was reason to believe that Exit would be unable to pay Classic's court costs if it lost. It wanted more money because it thought the case would run for some time.

Paul Dale QC represented Exit and described Classic Holidays' estimate of five days for the full hearing in the matter as "grossly overstated".

Exit's statement of claim is that it suffered damage to its reputation among its actual or potential customers, had incurred costs as a result of being compelled to seek an apology from Classic and, in issuing the proceedings, could suffer pecuniary loss.

The judge said that if Classic's case was that its representative did not say the words pleaded, then that is its defence.

"If its position is, in fact, that the statements were said, but the defence of qualified privilege applies, then it should say so. Further, it seems to me that if Exit Timeshare establishes that the defamatory statements as pleaded were made, it is difficult to see how they cannot carry the pleaded meanings given the nature of the allegations," the decision said.

A date is yet to be set for the substantive proceedings.